If the machines were to take over one day, I’d like to think technology controlled by humans would still win the day; that our Iron Man suits would be more than a match for the Terminators seeking our destruction.
When it comes to marine insurance, there are similar concerns about technology: will machines replace humans, or will technology make them better?
At Windward, we believe technology will make people better at their jobs. But it will probably also mean historically defined practitioner roles change more quickly. Excess capacity may provide an additional catalyst; it’s still difficult for insurers to make money, so it’s even more important they demonstrate added value.
The marine hull market has traditionally evaluated risk on the basis of a series of static features such as vessel type and tonnage. A deeper understanding of how a fleet behaves has, to date, been based on the underwriter’s knowledge of the fleet’s operation.
Thanks to technology, that’s changing. The adoption of operational profiles in analysing vessel behaviour will often reinforce the underwriter’s deep understanding of a fleet and their intuition on new risks. But it will also provide a fresh perspective on a fleet’s risk drivers based on its operational history. This facilitates a risk score based on more than just the static features of the operator and vessel. For example, the operational profile might show a fleet spending excessive time in extreme weather, making its vessels 3.5 times more likely to suffer mechanical breakdown. This way, a granular view of risk can facilitate improved risk selection, distinguishing between apparently similar fleets.
Big data analysis, meanwhile, can provide invaluable insights into fleets’ operational profiles; it can keep the risk advisory role relevant and at the forefront of the industry. AI can augment risk underwriting, enabling insurers to provide customers with deeper insights into risk and provide clear added value.
It may not be as exciting as an Iron Man suit, but in a soft market, new technology can help marine insurers really show their mettle.